President says, but if advised otherwise, willing to correct Exxon bonus issue

WHILE President David Granger does not believe the government’s move not to place the US$18M signing bonus received from U.S. oil giant ExxonMobil into the Consolidated Fund is illegal, if so proven his administration will act accordingly.

Government has placed the money into an escrow account at the Bank of Guyana (BOG) until such time as it is ready to access the funds, which have been earmarked for the payment of legal fees if the Guyana-Venezuela border controversy is referred to the International Court of Justice (ICJ).

US$15M has been assigned for legal fees in the event the matter is referred to the ICJ, while the remaining US$3M will be set aside for the funding of urgent training of Guyanese in areas relative to the oil-and-gas industry. Asked at his first press conference for the year, whether he accepts that money being paid to Guyana and not placed into the Consolidated Fund is illegal, Mr Granger said, “I do not accept that it was illegal; I would not knowingly do something which is not lawful.”

“As I pointed out, the absence of disclosure does not necessarily mean the presence of deceit,” he said, stressing that his government had good reason for not disclosing the signing bonus which occurred in 2016. The President made it clear too that no crime has been committed or proven. “It was a course of action which was recommended and I feel where the money is located at present would be insulated from being misused or stolen. I don’t believe there is any illegality; I don’t think there is any corruption or any intention to misuse that money.”

Notwithstanding his position, the Head-of-State said if advised by lawyers that government’s move “does not conform with the financial regulations, we will comply with the ruling of any court or with legal advice. But at present the money is safe, it belongs to the Guyanese people, it was intended to be used for a specific purpose and that purpose has not been met as yet; we need it there, that’s why we put it there, but the money is safe,” President Granger assured.

Finance Minister Winston Jordan this week said that the US$18 million signing bonus from ExxonMobil will be paid into the Consolidated Fund whenever government decides to use the funds for the identified purpose. “The $18M is in a special account at the Bank of Guyana. It’s there because it’s designed for a special purpose. Whenever that special purpose is activated, the monies will first go to the Consolidated Fund,” he was quoted as telling the Department of Public Information (DPI).

After the money is deposited into the Consolidated Fund, Jordan said government would go to Parliament with a supplementary budget to pay those who need to be paid, so that it will be reflected in the government’s estimates.
Additionally, the Finance Minister explained that the foreign currency would be sold to the BOG before it is deposited in the Consolidated Fund, which would increase the Central Bank’s reserves.

But the move by the government is reportedly being investigated by the Auditor General, Deodat Sharma. In a December 13, 2017 article titled, “Auditor General probing gov’t failure to put Exxon signing bonus into Consolidated Fund,” the auditor general referenced Article 216 of the Constitution of Guyana, which states that “all revenues or other moneys raised or received by Guyana (not being revenues or other moneys that are payable, by or under an Act of Parliament, into some other fund established for any specific purpose or that may, by or under such an Act, be retained by the authority that received them for the purpose of defraying the expenses of that authority) shall be paid into and form one Consolidated Fund.”

He promised to seek confirmation from the oil company on the signing bonus and also find out whether any other monies have been paid by the company to the government. “…So, very soon I am determined to write Exxon, because I want to be sure that it is not only this amount that was paid. I want to know if any other amount was paid for any other purpose,” Sharma was quoted as saying in the Stabroek News.

There has been much discourse in the past few weeks about the signing bonus and it was last Friday that Minister of Natural Resources Raphael Trotman disclosed that government did receive the money. He did not disclose the amount. Previously, the Finance Minister had said that the government did not receive a signing bonus. On Sunday, ExxonMobil’s Country Manager Rod Henson disclosed that it did pay over the US$18M and noted that signing bonuses are not unusual in the sector. Government has since committed to releasing its agreement with the oil company by the end of this month.

Meanwhile, when questioned on the government’s reputation with respect to accountability, transparency and good governance, given the discourse surrounding the signing bonus, President Granger said, “I think the government has been very cautious, we have been taking our time and we would be very careful to make sure that none of our officials are compromised.”

He noted that he wants what’s best for Guyana and so reputation aside, his administration is working towards having a good regulatory framework, so much so that should any company be found in breach of local laws, they will face the full brunt of the law.

“I am not afraid of reputation; let’s see what happens on the ground and if people break the laws they would be brought before the court; and if those persons who break the law are in the government of Guyana or within Guyanese jurisdiction, they will be brought before the courts,” the Head-of-State told reporters. Additionally, in his opening statement, the President said his government will continue to build its institutional capacity through the adoption of appropriate regulatory and legislative frameworks for the sustainable management of the country’s natural resources, which includes the emerging petroleum sector.

“We are seeking the best advice to enable us to adopt the best international practices,” President Granger assured.